Brief History of Contribution Ordinances/Impact Fees
"'Dedications,' 'contributions' and 'fees' are interchangeable exaction concepts. The exaction concept is simple—the developer, in return for the privilege of developing his land and realizing a profit because of governmental approval, agrees to donate to the municipality an amount of land, or money in lieu of land, proportioned to the need for certain services necessitated by the influx of new residents or employees into the community attributable to the new development...

"The first kind of land use regulation employed by local governments to shift the capital expense burden associated with growth to the developer was the required dedication. Local governments conditioned their approval of a subdivision plat upon the developer's agreement to dedicate land to be used for items such as streets, sidewalks, easements, rights-of-way, water and sewer systems, parks, and schools...

"The in-lieu fee was a refinement of the required dedications. To require each subdivision developer to dedicate land for park and/or school purposes did not solve the problem of providing such facilities for all developing areas... The in-lieu fee solved this problem by substituting a money payment for dedication as a condition for approval of a new development when it was determined that dedication of land was not feasible. Both the dedication requirement and the in-lieu fee requirement were designed to address only the problem of providing a site for the facility. Such an exaction ignored the problem of how to finance the actual construction of the facility on the land...

"Impact fees were created as a device to fund the development of facilities that historically were not provided for by dedication... Impact fees can be used to finance capital facilities not normally subject to dedication requirements and in-lieu fees and can more readily be applied to capital facilities constructed outside of the new development, the need for which is generated by that development." —Source: Land Use Law, Ch. 6, Illinois Institute for Continuing Legal Education, 1989.

Position Of The Sponsors Of S.B. 1828
"...increasingly, those units of local government have turned to excessive impact fees and impact fees that are not authorized by any law to accomplish those goals. In many instances, impact fees which are intended to reflect a new development's proportionate share of the new development's impact on the community, have simply become revenue generators for the local community with arbitrary calculations of amounts due and with little accountability of their ultimate use. The problem and the unfairness are likely to

escalate as units of local government come to grips with the reality of the tax cap legislation which places a limit on the extent to which units of local government can rely on the property tax as a revenue generator."—Source: Homebuilders Association of Illinois, memo 4/14/91.

Statement Of Legislative Intent
S.B. 1828 is an initiative of the Homebuilders Association of Illinois to combat what they feel has become "legalized extortion." Specifically, the homebuilders feel that cities are beginning to take advantage of them as tax caps are established and less state and federal money becomes available for these infrastructure projects.

S.B. 1828 creates the Illinois Infrastructure Expansion Act. The legislation establishes the exclusive basis upon which units of local government may impose impact fees for public infrastructure improvements, school lands, and park lands that are needed to serve a particular development. Furthermore, the bill limits those projects in which impact fees can be used.

The Act
Under the proposed act, a municipality (city, village or county) will be first required to prepare and submit a needs assessment plan before an impact fee ordinance for park land can be adopted. This plan must be current at the time any impact fees are extracted. The plan must describe the nature of the existing improvements, the current levels of service, an estimate of the nature and location of new developments to occur within the service area in the next ten years, and a description of prior and estimated sources and amounts of monies used or to be used to provide park sites. A service area improvement plan must be completed. Only then may a municipality enact an impact fee ordinance.

Any unit of local government that plans to adopt an impact fee ordinance must also establish an advisory committee. The duties of the advisory committee include: advice on the preparation of the needs assessment; monitoring and evaluation of the assessment of development impact fees; annual reports to the governing body of the municipality concerning the progress of the program; and advice on updating or revising the needs assessment plans. The committee must consist of at least 50% membership from brokerage, development and building industries of the community, and officials of the municipality may not be members of the advisory committee.

Prior to the adoption of an ordinance to impose impact fees, the municipality must also hold public hearings on the matter. At the hearing, the Advisory Committee is to make a recommendation to adopt, reject, or modify the impact fee proposal.

A methodology of assessment must be developed based on a clear and objective formula for fair market value of lands, bedroom mixes, and population estimates so that a developer may accurately predict the development exaction to be imposed.

The act sets forth detailed requirements for hearings, including the form of newspaper notice of a public hearing on the plan which is similar in size, and location in the newspaper, to the Truth-In-Taxation notice requirements.

Once the identified need for school lands or park lands has been satisfied pursuant to the needs assessment, no further development exactions on new developments may be imposed until shown to be necessary by an updated Needs Assessment.—Source: Mr. Roger Huebner, Illinois Municipal League.

A Few Problems?
• The bill freezes the "rate" of contribution to the level of park lands already available in a park district in proportion to its population. No "currently accepted national standard" for park land requirements may be utilized. If a
community is under-served with park lands, the new development is required to contribute only to the lower standard.
• Contributions/fees may only be used to acquire raw land — no improvements, enhancements or purchase of equipment if allowed.
• Funds not used to acquire land after six years must be returned.
• The developer can determine whether to contribute land or cash-in-lieu thereof.
• The needs assessment, the service area improvement plan, the "loading" of the advisory committee, the required updating relating to needs and land values, the required public hearings— all are costly and cumbersome.
• Other companion municipal needs—such as fire protection districts, and libraries—are not provided for and become a burden on your constituents.
• The bill ties the hands of your city or village in negotiating a better deal for your district in an annexation agreement— it, the bill, becomes the only standard for park contributions.
• If a developer previously made a contribution to your district in excess of the standards to become law, he gets a credit for the excess against any future contributions to your district.
• The bill includes all local government entities, including home rule units, except the city of Chicago— an obvious ploy to bargain support from Chicago to get it enacted.

What Is The Status Of S.B. 1828?
A subcommittee of the Impact Fee Committee of the Illinois Municipal League has drafted a substitute piece of legislation to present to this bill's sponsor, Representative Charles Hartke of Effingham. We should join with our local school districts, municipalities and other affected taxing bodies in urging our local legislators to let Mr. Hartke know of our opposition to the bill as proposed. The homebuilders, who advertise heavily in the press, obviously have the ear of the press.

The subcommittee presented the proposed bill to the full Impact Fee Committee in Oak Brook January 20. After much discussion and modification, the bill is scheduled for presentation to the other interested parties, including the Illinois Association of Park Districts and Illinois Parks and Recreation Association.

Of course, it is unknown whether the bill will be subject to a successful compromise or whether the builders will continue to press Representative Hartke to take a hard line in support of Senate Bill 1828 in its present totally unacceptable form. Please call or write your local state legislators to advise them of the crippling effects of further restriction on park district revenues.

Summary
"The use of impact fees is limited very severely in this proposed legislation to an almost exclusive land acquisition purpose for schools and parks. Only two other types of capital improvements are covered: waste water treatment systems and potable water distribution systems (but not land for these systems). The important impact of development on fire protection, police, the court system, libraries and government services is ignored. In addition, the long-term impacts of development are also implicitly stated to be the burden of taxpayers. By approving this legislation, some very fundamentally unsound ideas will find their way into state law. This bill is anti-taxpayer, anti-responsible government and should be rejected." — Source: Mr. Ray Ontiveros, DuPage Mayors and Managers Conference.

About the Author
Gerald J. Brooks, J.D., is senior partner of James, Brooks, Adams & Tarulis.